How Ford Beat the USA’s Chicken Tax Tariffs

In 1963, the US economy took a hit when France and West Germany placed a tariff on the importation of chicken. As the export of poultry made up a large proportion of America’s exports at the time, America’s export revenues were hit hard. In response, Lyndon B. Johnson placed a 25% tariff on the importation of brandy, light trucks, potato starch and other goods; this became known as the chicken tax.

And so begins our story with Ford’s Transit Connect. Ford sell this van mainly in Europe; hence they decided to make it in Turkey. However, when they wanted to import the van into the USA in 2005, because it was categorised as a light cargo truck by US customs officials, it was eligible for the 25% import tax rather than the 2.5% imposed on passenger trucks.

Ford, though, were never going to pay that 25% tax, they were too smart for it. When US customers ordered a cargo truck, Ford built the van in Turkey but added some extra seats in the rear to turn the commercial vehicle into one designed to transport multiple passengers. Thus, when it passed through US customs, it was classified as a passenger truck and only faced the 2.5% tariff. Once in the country, the vans were then shipped off to Baltimore where they were reassembled into cargo trucks and then finally handed over to their new owners.

After years of Ford out-manoeuvring the chicken tax, US customs finally cracked down on their legendary antics in 2013. Myles Harmon, customs director, said: “The product as entered is not a commercial reality; it exists only to manipulate the tariff schedule rather than for any manufacturing or commercial purpose.” Customs officials claimed that Ford because so efficient reassembling a passenger truck into a cargo truck that the sneaky task took them less than 11 minutes.